License, license License

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vilasman

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I am not afraid of getting my license. I maybe a little afraid of the test but that is why I spend time in certain other areas of this website.

Here's my quandry for today. I get my freshly newly minted license, lets say April 15th.
I know you have to have bonding and insurance to actually physically pick the license up.
April 20th I am bidding on and have the inside track on getting a LARGE job.
A job where I would need bonding and insurance at a level that I could not possibly have a snow balls chance in, well you know, covering.
Then what would you do.
As I understand bonding and insurance, the bond has to be big enough to cover completing the project if I default, die, so on so forth. As I understand insurance you maybe able to get really high insurance coverage but the longer you are in the business the lower the rate gets as you establish a track record of not screwing things up.
Is that correct or it is a little more equitable?
 
vilasman said:
I am not afraid of getting my license. I maybe a little afraid of the test but that is why I spend time in certain other areas of this website.
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It's time to face the music. Go take the test. After you get your master's license then you worry about starting a company and bidding jobs. You may not want to take on the big jobs until you cut your teeth on some small ones.
 
Vilasman,

Don't waste your time. Getting a bid bond/ preformance bond is a nightmare for an established company, let a lone a startup. First learn how to crawl before you walk.

Maybe give the "inside track" to a larger more established contractor with the financial and manpower capabilities to handle this job. In turn maybe he will give you the smaller jobs he does not want to be bothered with.

GOOD LUCK

Joe Villani
 
I wouldn't worry too much about insurance. The only problem you may encounter is that a lot of companies won't take on new ventures. It is true that the longer you're in business the better the rates, but general liability is fairly cheap. As for bonding, I haven't been down that road yet. To my understanding though it's extremely hard to get the first time, even if you are a well established business.
 
Vilas,
I'm not trying to rain on your parade...but (there's always a but)...don't let the dollar signs blind you.

Within days of getting my ECs credentials (back in the early 90's), I was "given" a job ~ a bakery and storefront. I was promtly stiffed for a few thousand dollars.

I "scaled back" and took smaller jobs ~ ceiling fans, some reno's for HO's and that sort of thing. I made money, but the company did not....I wasn't pricing things out properly.

This doomed plan went on for awhile until I had basically exhausted my reserves and had to go back to work for the "man". Back then (the early 90's) the internet is not what it is today ~ this free exchange of information that we enjoy now was non-existant.

Fast foward a few more years, and I put on the EC hat again. I see things completely differently now....I have also matured a bit ;)
I stared again, this time doing ONLY small reno's and some service work. When a customer asked if I could do something bigger for them...I ask myself one question (loosely based on what a wise man told me after the first crash):
Never do a job that is more than double a job you have previously done. Is this job double?

Going from a $400 CF job to a $40,000 restaurant uses a different part of your brain....but going from a $7800 renov. to a $15k new install will be very similar in nature.

My advice:
Start small
Gain experience (not in wiring, but in business)
YOU decide which jobs YOU will take.
Be happy ~ even if storm clouds form over your parade.
 
If you default on a performance bond the insurance company pays someone else to finish the work. Then the insurance company comes to you to pay them back in full. You have to pledge enough assets to cover the potential loss. If you don't have enough assets to pledge you will not get bonded. Even if you have the assets I doubt any insurance company would bond a project without a very good business track record.
 
Don't walk, run from that 'inside track'.
Ask your insurance man to arrange a meeting with a bonding company. The only chance you'll have is to personally indemnify the bond - if you have the capital to do it. I've been in that chair many times and I'll never sign over my house.
I appreciate your mozzy, but in all honesty to take on a large project and start up a company at the same time means in all likelyhood you will be attacked from every direction.
Trade off that job, and be gratefull you did.
Good Luck.
 
So the bonding issue is what I thought it would be.
Not withstanding the license issue.

So for future reference, the only way to build up to getting a fat bond is to establish a track record and the let your track record put you in a posistion that you can get considered to get the bond and possibly reduce the percentage of collateral that you have to put up to back it?
 
vilasman said:
So.... does the bond establish the glass ceiling in electrical contracting?
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I guess you could look at it that way, but it actually is there to protect the GC or owner from inexperienced and under funded companies (sound familiar?).

I would be curious as to how you might get the "inside track" on a large project. I would be suspicious that it is an attempt to get you to underbid a large job. If that happens, it would be the worst experience you can imagine. You haven't told us if you have managed projects of this magnitude while working for others or if this will be the 1st time attempting a project of this size. If you have experience with this size of a project then it might not be the pitfall a lot of us suspect you may be walking into. If you don't have experience in this size of a project, then you should probably listen to the advice to crawl, walk, then run.

Good luck.
 
I agree with the others on this. You should start small and work your way up. Don't let the big $$$ cloud your view of what your main objective is - making $$$. I don't know what type of project this is that you're bidding on but it seems you're being asked to provide proof of insurance, workman's comp, a bid bond, a performance bond, etc. Is anyone requiring the owner to provide a payment bond ? How long after you submit a bill will you be paid ? 30 days ? 60 days ? 90 days ? 120 days ? Aside from your insurance, when you take on jobs you have to make sure that you're properly capitalized because the cash flow is going to be a lot slower than you think. Take Celtic's advice on this. He's right on the money.
 
I am not ignoring the advice by any means. Thats one reason why I have been so quiet for the last 12 hrs or so.
Inside track... Architect, GC and I, we are friends, we have done other projects together and we have other smaller projects to do before we get to the monster. We worked on the GC's house together. We have not formed a joint business together, but we do approach clients, or present to clients that approach us as a design build company.

As for the expierence level. The way I met the master that I now work for, 10-12 or however many years ago that it was, I had a 5 bedroom house out of the ground that I needed a permit for and I was in a house that changed from being a simple renovation to being a group home with fire alarms and all the stuff that group homes have. That was my second group home.

I noticed what one of the other individuals said about the next job being twice the size of the preceeding. I have a couple of $20k jobs under my belt and a few more $10-15k jobs. And by this I mean, I wrote the contract in my name in partnership with the master, I obtained the permit, did the work, got it past the inspectors and was the point man when the utility came to hook it up.

I already have a $40k level job lined up, should have the print next week. The BIG job wont show up till around this time next year.

I have had 2 men under me. I got to thinking about the very issue of managing men, before you all raised the issue here and in the back of my mind i was formulating a question on, "what's the biggest job you have done with a minimum of help" or something close to that. But then I thought about it and I concluded the following. On one hand when I price a job, one of the ways I do it, is T&M so I have man hours. On the other hand I remembered that the master I work for was the master and ran the shop for the Metro system in Wash DC.

He probably has the needed expierence and he told me 2 days ago that he is more than willing to work with me on the project.

I guess I am fortunate to be with a master that is trying to teach me and expose me to everything he can.

I guess I am also fortunate to have a wife that is almost finished with a MBA
 
I am trying to come up with a good answer for that question.
From the vantage point of not having taken the test, but having somewhat reviewed the code book, it seems that what the code book covers is so much broader than what i have worked on. I have done 70-80% residential. I am almost absolutely fearless when it comes trouble shooting and fixing screw ups.
And I know you all warn people to stay away from screw ups.
I work for the oldest and arguably the longest in business Master in Washington DC, so when a owner or GC or Architect gets a job that is jacked up and the city tells them it's jacked up, it gets suggested that they go to this man to, un screw it up. We used to collaborate on how to do it, now it leans towards, we go into the job, together we get the lay of the problems, put of respect and defference
I hang back and let him handle things while I come up with a plan of attack and then generally, he gets a tall beverage and i go fix the issues.
I dont know what most apprentices do, I mean i know they carry pipe and supplies and go for, and do alot of muck work, and slowly move up from there.

I dont understand how to go from being the man in the shadow of the man who gets work from the highest priced design build firms in the city, (without competitive bidding) to being the man, that gets the work from the highest priced design build firms in the city, when the man wants you to take over and the design build people sorta want you to take it over.
Cause I've been doing the work anyway.

I know license is like the ground work, but it seems like their is more to it.
 
metro dc is a tough area, look into what they did to Tom Warner (Super Tom plumbing, heating, electric) who's now USE (utility service express)

the licensing board killed him
 
vilasman said:
And by this I mean, I wrote the contract in my name in partnership with the master, I obtained the permit, did the work, got it past the inspectors and was the point man when the utility came to hook it up.
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If you are in a partnership with this guy I don't see a problem. Get your license and then buy him out.

If you are not in a partnership all this work that you have been doing for years sounds illegal to me. The best thing to do is stop this ASAP and start a legal business. Just because this old master has friends and is well connected doesn't mean you will be able to get away with the same things. ( a partnership is a legal entity and not just something on a business card or letterhead).

If this guy really wanted you to take over he would have been training you on the business side of things before now.:-? :-?



 
emahler said:
metro dc is a tough area, look into what they did to Tom Warner (Super Tom plumbing, heating, electric) who's now USE (utility service express)

the licensing board killed him
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No chance Tom did it to himself?
Attorney General J. Joseph Curran, Jr. announced today that Thomas F. Warner and his plumbing companies have been ordered to pay restitution to consumers and $5 million in civil penalties for violating the Consumer Protection Act by sending workers who were not licensed plumbers to customers' homes and having a "replace, not repair" policy.

The Division also affirmed Judge Zlotnick's finding that Warner's policy was to tell consumers that plumbing fixtures needed replacement without disclosing that repairs were an alternative. In one instance, a Severn woman was told by a Warner plumber that she needed to have all of the pipes in her basement replaced for more than $3,000. The woman called another plumber, who fixed the leak for less than $60. Additionally, the Division upheld the finding that the Warner companies, which operated from 1989 to1995 as the Sears Authorized Plumber, violated the Consumer Protection Act because they did not carry parts to repair Sears brand fixtures.
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http://www.oag.state.md.us/Press/pr303.htm


This seems to be Tom's side of the equation:
The law cited by the Attorney General has been on the books for eleven years, and we are the first plumber to have been charged with its violation.
The work in question is relatively simple and often is performed on a do-it-yourself basis by home handymen. None- the less, the people we assigned are trained and qualified journeymen plumbers. Most of them simply do not want to have to sit for the written examination required to obtain licensure.
Local plumbing inspectors understand the issue and interpret the law to mean that unlicensed plumbers can be permitted to perform certain routine services as long as they work under the authority of a licensed master plumber who takes ultimate responsibility for their work. (In a similar manner, unlicensed engineering technicians are permitted to important construction inspections when they work under the authority of a licensed professional engineer who ultimately takes responsibility for the quality of their work.)
Stated simply, what we have done is a common practice in this area and, until the Attorney General's recent action, was considered wholly in compliance with the law. If the Attorney General's interpretation of the law is upheld, consumers will have to pay more (licensed journeymen plumbers are in short supply) for no real benefit.
If we really want to help consumers, then, to my mind, we should change the licensure examination to one in which plumbers are required to demonstrate their plumbing skills, not their written examination skills. Not everyone is as particular about who they have going into customers' homes as Warner, however. Our technicians are well trained and experienced. As proof of that, the Attorney General has not given us one example of poor workmanship or of a consumer who did not receive the valuable service he or she asked Warner or AMS to perform. Yet, the Attorney General asks for these customers to receive all of their money back.
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http://www.phcc.org/9802.htm


I actually wasn't able to find that much info on this situation.
 
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